Critics Fail to Stop City Panel From Voting to Aid Arts Group

By SEWELL CHAN

Published: September 13, 2006

Despite pleas by several elected officials to reject a $12.75 million bond-financing project for a nonprofit group founded by Lenora B. Fulani and Fred Newman, a New York City panel approved the deal yesterday in an unusually close vote.

Dr. Fulani and Dr. Newman, who as leading members of the Independence Party supported Mayor Michael R. Bloomberg's two successful campaigns for mayor, founded a nonprofit group, the All Stars Project, in 1981. Dr. Fulani has been criticized for making inflammatory comments about Jews in the late 1980's, while Dr. Newman advocates an unorthodox form of therapy that critics have likened to a cult.

On a 6-to-4 vote, the city's Industrial Development Agency approved tax-exempt bond financing that will allow the All Stars Project, which uses the performing arts to help low-income children, to make improvements on its Midtown headquarters and to refinance an earlier bond deal that the agency approved in 2002.

At a meeting in Lower Manhattan yesterday, the agency's chairman, Joshua J. Sirefman, who is also interim president of the city's Economic Development Corporation, told the board that he took the objections of other officials ''very seriously'' but that there was no sound basis to turn down the project.

''Based on our review of the All Stars Project, we have determined that the organization is in good standing, we found no evidence of misconduct of any kind by the organization, and we established that the project would benefit New York City,'' he said. ''We are aware that allegations of wrongdoing by individuals associated with the organization existed a number of years ago.''

Dr. Fulani, who trained as a psychologist, wrote in 1989 that Jews ''had to sell their souls to acquire Israel'' and, in the process, had to ''function as mass murderers of people of color.'' Dr. Newman, who has a doctorate in philosophy, last year acknowledged having intimate relationships with women who initially approached him for therapy.

On Monday, the state comptroller, Alan G. Hevesi, and three other officials urged Mr. Sirefman to reject the project. Mr. Bloomberg last year called Dr. Fulani's comments about Jews ''despicable,'' but he has donated money to both the Independence Party and the All Stars Project.

Along with Mr. Sirefman, two other mayoral representatives voted in favor of the project, as did representatives of Daniel L. Doctoroff, the deputy mayor for economic development; Michael A. Cardozo, the corporation counsel, and Amanda M. Burden, chairwoman of the City Planning Commission.

Representatives of the Manhattan, Bronx and Queens borough presidents voted against the project, as did the representative of City Comptroller William C. Thompson Jr. The representative of the Brooklyn borough president abstained. Two members were absent. The 15-member board has two vacancies.